Online Reviews Can Hurt Contractors and Homeownerscomments (12) December 12th, 2012 in Blogs
An unhappy customer pans her renovation contractor on Yelp, and the builder responds with a $750,000 defamation lawsuit
The wide reach of the Internet and the ease of posting online opinions are leading to very public disputes between builders and their customers, with reputations and hundreds of thousands of dollars hanging in the balance.
Not long ago, a Fairfax, Virginia, woman furious over her treatment by a Washington, D.C., contractor took her beef public at Yelp, an online site that offers reviews of everyone from physicians to auto mechanics.
She accused the builder of damaging her home, billing her for work that was not performed and even making off with some of her jewelry, according to an article in The Washington Post.
"Bottom line," she wrote, "do not put yourself through this nightmare of a contractor."
And the contractor's response? He sued his onetime customer for $750,000, claiming that reviews at Yelp and Angie's List were defamatory and driving away business.
Not the first disgruntled homeowner
The Post also reported on an earlier case in which a remodeling contractor sued unhappy customers for $6 million after they complained about his performance on Angie's List, another online source of reviews for service providers.
Angry customers who turn to the Internet see it as a First Amendment right, but business owners worry that a single false review can have far reaching effects. The Washington, D.C., contractor, for example, argues that negative comments have cost him $300,000 in lost business.
Angie's List and Yelp have been found immune from defamation lawsuits. "It is important to specify that Angie's List is immune from defamation suits based on the postings of third parties on its interactive Internet site, according to the federal law known as the Communications Decency Act of 1996," one court ruilng says.
But that protection hasn't prevented the disputes between builders and customers from finding their way to court, and no one knows exactly how often that takes place. If the number is apparently small now, The Post says, it's on the increase.
Yelp accused of skewing reviews
Yelp can't be held accountable for posting someone's opinion online, but the company has been accused of wrongdoing of its own. In a 2011 class action suit, Yelp was charged with offering to remove negative reviews in exchange for buying advertisements. The suit was dismissed.
Critics, however, were quick to step forward with claims that Yelp approached them to buy ads and promised to review how the online reviews were being filtered in return. Some posts accused Yelp of removing positive reviews and allowing negative reviews to stand, giving consumers a distorted picture of their business practicies. Some posts claimed Yelp reviewers threatened negative online reviews unless their requests for free or reduced price services were met. Results could be ruinous.
The impact of online opinion forums is of particular interest to entrepreneurs like Michael Fertik, the CEO of a company called reputation.com. Fertik's company helps consumers manage their online reputations, including, according to an article in The New York Times, ways of making negative reviews less visible.
Fertik is part of the growing "consumer data trade," a $2 billion indusry in the U.S. that is mostly unregulated, The Times said.
Thanks to the internet , the distribution of information and opinions--good and bad, accurate and erroneous--is now instantaneous and almost impossible to control once online.
Is the moral of the story "think twice before you click 'submit'"?
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